Avoid These Benefits Administration Mistakes
Posted on: March 16, 2020 by iSure
Once you have great employees on board, it is important to know how to retain them. One way to do that is by avoiding mistakes in the benefits administration process. Administer your benefits in an appropriate and effective manner in order to retain your employees.
Complications will inevitably arise when you offer benefits, since many key perks such as health insurance and retirement plans fall under government control, making it easier to make mistakes when building its structure.
The IRS and the U.S. Department of Labor conduct audits to determine if employers are compliant in regulations. A simple mistake can be a very costly one.
The biggest mistake is leaving employees out of the plan. For instance, excluding part-timer employees, clerical and custodial staff. If one employee gets a tax-advantaged benefit, the same benefit must be applied to everyone.
Employee benefits administration compliance can be complex. Speak to an employee benefits solutions consultant about how you can protect your business.
Providing benefits that correspond to your employees’ needs and abiding by all the laws is crucial. All too often businesses’ approaches to benefits involve costly errors that can get them in financial trouble.
Here are common mistakes when implementing employee benefit programs.
Absorbing the Entire Cost of Employee Benefits
Fewer companies are taking on the whole benefits bill these days. The size of employee contributions varies, but an advantage of a co-payment plan is that it eliminates employees who don’t need coverage. Many employees are covered under other policies- such as a parent’s or spouses, for instance. If you offer insurance for free, they are way more inclined to take it, but even small copays deter them from it and can save you money.
Covering Non Employees
Many business owners want to purchase group-rate coverage for their relatives or friends. However, in the event of a large claim, the insurer may want to investigate, which can result in disallowance of the claims or cancellation of the policy. Whenever you want to cover somebody who might not qualify for the plan, be honest with your insurer.
Poorly Done Paperwork
Benefits administration is often assigned to an employee who holds any other responsibilities and may not be advanced in technicalities and could miss many important details.
A common mistake is not enrolling new employees in plans during the open enrollment period and some plans have a fixed time period to qualify.
Attempting to bring in employees under closed employment sometimes results in expensive litigation, so insuring new employees should be completed during open enrollment.
Not Telling Employees What Their Benefits Cost
Regularly provide employees with a benefits statement that clearly states what they’re getting and at what cost, so employees remain aware of what is being offered to them.
Offering Unwanted Benefits
Know what your employees really want from you. One way to know what benefits your employees’ value is by surveying them and having them rank benefits in terms of desirability. If workers’ needs vary widely, consider plans that give workers a menu of benefits and a fixed amount to spend.
About iSure Insurance Brokers
After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (855) 221-3406 to learn more about what we can offer you.
Posted in: Employee Benefits